HMRC calls time on registering for VAT using a paper form

HM Revenue & Customs has removed the ability of most taxpayers to register for VAT via a paper application form, from yesterday.

There was no consultation on the removal and, other than the digitally-excluded, only a short list of specific business-types can keep using ‘Form VAT1’ to register.

Specifically, only those business-taxpayers for whom digital application functionality isn’t built into HMRC’s online VAT registration system are still allowed to make paper applications, the Low Incomes Tax Reform Group (LITRG) told ContractorUK.  

'Wait for approval, then wait for the form in the post'

Even then, they must call HMRC for a paper application and if an adviser agrees they qualify, the businesses face “waiting for the form to arrive in the post, rather than being able to simply download it from .gov”, says LITRG’s technical officer Meredith McCammond.

Perhaps that’s understandable, though, as the taxman has hardly had a good time with his downloads recently.

Following the Revenue’s move last month to stop automatically sending out paper returns to many taxpayers, the department was forced to clarify that self-assessors could still print off the tax return available on its website, despite the return carrying the message, “For Reference Only.”

In its clarification ahead of the Oct 31st deadline, HMRC said self-assessment returns downloaded from .gov (notably the “reference only” form) would still be accepted, as long as they were accurately completed and signed.

'Taxman strongly encouraging online self-assessment'

Following HMRC’s clarification, the LITRG reflected: “We welcome this news… [although] HMRC are still strongly encouraging taxpayers to file their self-assessment tax return online where possible.”

The Treasury is strongly encouraging a virtual HMRC experience as well.

In response to Damian Green MP wondering how long it takes HMRC to answer the phone to taxpayers calling in for help, the then-financial secretary to the Treasury, Victora Atkins, told him about HMRC’s app.

'HMRC's app lets taxpayers perform tasks which previously they had to call about'

“An increasing number of customers are using the HMRC mobile app – with more than one million new users and more than 56 million logins in 2022 to 2023,” Atkins said on Oct 25th.

“The app enables customers to perform tasks on their smartphones or tablets for which they previously needed to call [HMRC], such as; view their PAYE tax code and annual tax summary…file their self-assessment return, pay their tax bill and use a tax calculator.”

Promoted yesterday by prime minister Rishi Sunak to health secretary, Atkins did address HMRC’s call-handling times, by handing Green a link to the department’s quarterly performance data.

'Average waiting time to speak to HMRC exceeds 20 minutes'

According to the July-to-September 2023 dataset, 70% of taxpayers waited more than 10 minutes to have their call answered, with the average time to get through to an adviser now exceeding 20 minutes.

But call-answering data for HMRC’s self-assessment helpline simply doesn’t exist for July and August 2023, as the department turned off the helpline between June 12th and September 4th.

Worryingly, a new study by GoSimple Tax indicates that taxpayers probably could do with as much support as possible.

'85,000 self-employed intending to flout tax return deadline'

In fact, the self-assessment platform found that the equivalent of almost 85,000 self-employed individuals intend to pay their tax bill late, despite 11 weeks still to go before the deadline of Jan 31st 2024.

Twenty-three per cent said they plan to cut it fine but still submit a month before the cut-off; a proactive 20% will have it filed “a few months before” and nearly one-sixth suggested their return was with HMRC already (‘15% will [file] six months before’).

For accountants, it means busy season has already begun and at this stage, it has a competitive edge.

'Ignore'

“Posts [on LinkedIn] from [other accountancy] firms saying they have submitted all returns…I ignore,” reflected Imperium Group’s head of tax Jon Stewart.

“That must be a great position to be in. But every tax [practice] is different, and although we might not have submitted all our returns, we are slightly ahead of last year in percentage terms, but we do have an extra 60 returns to do this year.”

“We are at 56 per cent ‘out to client,’ but with an extra 102 [returns] this year,” shot back a head of tax at another firm.

'Make the most of your financial situation'

Heading up his advisory firm’s tax investigations team, Tom Wallace of WTT Consulting suggests that with returns facing the Jan 31st deadline, there’s no time like the present.

“While it may seem like there's plenty of time left… filing early means you can put your financial year behind you and enjoy peace of mind, knowing that your tax obligations are met,” said Wallace, a former tax inspector.

He added: “[With] self-assessment… [you want to] make it as smooth as possible…ensuring you are fully compliant and [at the same time making] the most of your financial situation. [Whatever you do] don't wait until the last minute and rush through your tax return.”